MARKET REPORT: UK shares join global rally

UK shares joined a global rally as traders cheered promising results from a possible coronavirus treatment from the US. 

Findings from a clinical trial in Chicago of an experimental antiviral drug called remdesivir, developed by US pharmaceuticals group Gilead Sciences, showed most patients made a rapid recovery in fever and respiratory symptoms. 

The study was small-scale – just 125 people – and will need rigorous and wider testing, but the results were nonetheless encouraging. Josh Mahony, senior market analyst at trading platform IG, said: ‘Gilead’s remdesivir trial results breathed a new sense of optimism into markets, with many seeing this as the potential beginning of the end for this coronavirus crisis.’ 

Markets were also boosted by plans laid out by President Trump to gradually reopen the US economy – restoring normal activity through a ‘phased and deliberate approach’ in places that have strong testing and are seeing virus cases dropping. 

The double-whammy of good news sent the FTSE 100 riding into the weekend on a high, rising 2.82 per cent, or 158.53 points, to 5786.96, in line with similar rises on Germany’s Dax and France’s Cac 40. The FTSE 250 climbed 3.13 per cent, or 480.72 points, to 15859.29. 

The optimism on the Footsie lifted some of the worst-affected travel and leisure stocks, boosting firms such as Carnival (up 6 per cent, or 51.2p, to 912p), British Airwaysowner IAG (up 6.4 per cent, or 14.1p, to 233.4p) and Cineworld (up 21.4 per cent, or 11.04p, to 62.62p). 

But it’s worth remembering that while the Footsie has risen 17 per cent since hitting its lowest point in March, it is still down 22 per cent since the coronavirus plunged markets into turmoil in late February. The scale of this market tumult was laid bare in first-quarter figures from hedge fund manager Man Group. The former Booker Prize-sponsor took an 11.5 per cent hit to its funds between January to March, worth £8.6 billion, and worth £11.2 billion in total including foreign exchange and other movements. 

But the firm outperformed its peers and shares rose 3.5 per cent, or 4.3p, to 126.45p as it stuck to plans to pay a dividend and buy back shares. Gambling giant Flutter Entertainment, meanwhile, outperformed its own expectations, with revenues falling ‘only 32 per cent’, which was less than it expected, amid the widespread cancellation of sporting events. Shares rose 15.7 per cent, or 1222p, to 9018p. 

And miner Rio Tinto surged 3.3 per cent, or 122.5p, to 3816.5p, after it released stronger-than-expected iron ore production figures as Chinese industry began to chug back into gear. The effect was contagious – with fellow mining heavyweights Anglo American gaining 5.9 per cent, or 78.8p, to 1422.4p, and Glencore climbing 7.3 per cent, or 9.64p, to 141.28p. 

Estate agents were also on the up. AIM-listed Purplebricks added 4.5 per cent, or 1.55p, to close at 35.9p after finance chief James Davies quit and was replaced by former Secret Escapes and Zoopla finance boss Andrew Botha. Foxtons rose 22.4 per cent, or 8.6p, to 47p as it furloughed 750 employees, slashed pay and announced plans to tap investors for £22m through a placing of new shares. 

Foxtons wasn’t the only firm asking shareholders to help it weather the coronavirus storm. Ten-pin bowling chain Hollywood Bowl (up 11.9 per cent, or 17p, to 160p) rolled out an £11m fundraise to boost its coffers so that it can keep expanding as soon as Covid19 restrictions lift. 

Primark-owner Associated British Foods, however, is appealing to the Government for support. Shares climbed 2.5 per cent, or 47.5p, at 1984p, after it told investors it was eligible for a taxpayer-backed loan.